Lawyer: U.S. Case Against SAC a 'Slam Dunk'

7/25/2013 4:05PM

U.S. prosecutors filed criminal and civil charges against SAC Capital Advisors, accusing the giant hedge-fund firm of a decadelong insider-trading “scheme” that was “substantial, pervasive and on a scale without known precedent.” WSJ's Ashby Jones and Solomon Wisenberg, partner at Barnes & Thornburg, discuss. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... the ... it's tasty ... the inside information ... on a scale without any known precedent ... in history ... textbooks ... as described in the indictment ... the scope of illegal trading ... Wednesday ... and it was was ... U S prosecutors filed criminal and civil charges against S A C Capital Advisors accusing the hedge fund all ... years of insider trading ... we will have back and mall right here right now on the New Saab ... good afternoon and welcome I'm Simon Constable ... us prosecutors called ... the trading a scheme that was substantial papaya says I'm on a scale without non precedents ... will Street tunnel and attach the Johnstown for my ... chief of US financial forty units sold one was booked on a smile ... together thank you gentlemen for being here ... let me start with you Ashby ... on recap what the story is so far has this thing keeps new stuff keeps coming out quite well and in this morning didn't really that being the biggest of the big user broken out was that ... as we just saw the Arar of the industry for ... New York Manhattan ... on ... his office filed ... a ... criminal charges against IDC's Capt S A C Capital One ... R S E C um portfolio manager ... aam ... really I think for ... even for those people who were very steep in this case it followed fall of the situation ... aam along in for even for them this was really a stunning piece of this because they didn't brought ... criminal charges against the firm itself does not like the Reverend on against Helen ... let let's get into some comments lying on his essay see up because that that seem to think about us and since this morning ... from Hayward ISS's is never trust model already insider trading and takes its compliance ... and management obligations or CFTC will continue to hope for a house we went through these masses ... that seems pretty pretty terrible but also pretty normal to say that something that I think so I mean it's it's it's it in its complaint because it means Mr Arar and his statements today talked alot about this culture of compliance for lack of it at Assisi capital saying that ... they they were all all all all boarded two problems a lot of time and they they went investigated ... and always look the other way always found excuses for ... e mails that were pretty damning or what have you in so he really surpass persons on the complaints Coulter so that's likely why we saw in the SEC's statement their content and lots of but I'm not someone was but kept ... in Washington ... Solomon thank thank you again for joining us ... the thing that I'm finding hard to square it is that we soul civil charges brought against the Steve Cohen the founder ... of S A C Capital at and they were very very minded charges what I know possible charges as the threshold of proof is low ... much love of the criminal charges and then we get criminal charges there ... sightseeing insider trading how do you square that they don't seem to go together a few calm proof ... that it at a lower level than the subtle color trying to do in the criminal code ... well the key is that a criminal cases against the company ... and even though technically the burden of proof in criminal cases ... is beyond a reasonable doubt ... when you ... when you bring criminal charges against a company in reality it's a ... very very low threshold it's basically ... like shooting fish in a barrel so the only got approved ones once they have any employee ... who's committed a criminal act in the face of essay see you got for employees ... who've already pled guilty to criminal acts former employees ... the one to have that the government only has to prove two things ... were they acting within the scope of their actual or apparent authority ... that's number one ... and Number two years ... were they trying anyway ... even partially ... to benefit the Corporation ... is the government improve those two things ... it doesn't even matter ... if these employees were acting against the express orders of the company or against company policy ... the company is tops ... technicalities of an EU ICU cited its passion about is that in an essay see this essay see dig itself out of this year and the business of ... defending people who are ... aam looked ads and investigated by ... by the state what he think ... with this company ... not a person ... and there's only one way really defended its pretty clear that this is what SEC's didn't do ... the only way to defend it is to say ... we had a very strong compliance policy ... at our policy was so strong ... in so clear ... that these employees had to know ... when they were engaging in insider trading ... that it was not really benefiting the company ... there were only trying to benefit themselves and that's really hard to do but this is the government can show ... that ... they were trying to benefit themselves but also the company ... that's enough and remember Kia ... bonuses that the employees were trying to get were tied to company performance show so invested in the very very hard for them to do is not impossible ... but it's given the very heart ... attack and to speak clearly SAIC ... has a lot of money it's it's it's it's disposal will be using that to defend Itself QQ thing we see a mass ... exodus of people signed by the jig is up aam all ... well I think we'll see a trickle of people we get an a I think it's all been alluded to these ... tea these sorts of cases when you bring them against a company can be extremely damaging infuriated example of Arthur Andersen ... on back in the Enron era know the Auditor minded you can work for for for dinner on ... it was acquitted and was charger was acquitted in Tuesday was convicted of an antiquated but U S Supreme Court still ... The ... and that the company supported by the indictment itself that title will have to file for bankruptcy so ... I think it's and it's it's really in a tough spot I do however think the good fight it's ... very very hard and hired some of the best lawyers that this this I'm expecting to mount ... an extremely vigorous some bidders for slowing asked him to continue as a telegraph ... Ashby Jones thank you Brian much of the gospel and a ... half in both the euro and sawn wizened ... in Washington DC thank